Every company wants to be paid as soon as possible. We all appreciate consumers who immediately whip out their chequebook or credit card. However, we also recognize that this does not always occur. Payment delinquencies will occur if a business lends credit in any manner. That is simply a fact of doing business.
When you follow a well-managed debt collection program and report overdue accounts to your debt collection agency on time, you may anticipate payments to flow in faster. For example, if you have excellent internal billing practices and a process for following up on nonpaying clients, those procedures and sending overdue accounts to your collection agency after 60 days build urgency and speed up payments from your consumers. But you must be diligent in submitting those accounts to your agency on time.
You should expect to keep more customers with sound debt-collection practices
When your company and the collection firm use effective debt collection practices, you can expect to keep more clients and maintain those hard-earned connections. However, just because you sent a customer to collections does not mean the relationship has to come to an end.
You can expect increased customer retention if you do the following
Internally, it all starts with billing on time and establishing expectations for how your company should be paid. Then, when a customer falls behind on payments, your accounts receivables should include courteous and respectful follow-ups. In brief, when consumers fail to pay, you should follow up with a politely phrased letter notifying them of their obligations to you and an equally friendly phone call.
When you hire a third party debt collection agency, courteous and diplomatic interactions should be at the core of their plan. In addition, you should only work with a collection agency that is committed to treating your customers with the dignity and respect they deserve.
When this occurs, you should expect to retain more clients during the collection process.
How can your business improve the results of collection activity?
Your company may wonder how your debt collection agency may improve its performance.
Better results begin within your organization. In short, the more organized your internal accounts receivables program is, the better the results. Keep these points in mind when you prepare to hire a collection agency and want to review the outcomes.
● Do you notify customers about your payment terms?
● Do you invoice on time and on a regular basis?
● Do you follow up with delinquent customers on time?
● Do you adhere to fundamental accounting and receivables procedures?
● Are your accounts receivable records meticulous, and can you provide up-to-date reports?
● Do you have customer contracts or letters of agreement?
● Do you put off collection action for too long? For instance, 6 to 12 months and
If your organization has a solid and timely accounts receivable program, you can expect better results when using the right debt collection agency.
Want results? Be prepared.